This is a fully comprehensive financial model for anyone looking to invest in mixed-use real estate. Mixed-use simply means the property or compound is rented out for various things that could have varying rents, square footage, development/acquisition costs, and potentially separate exit values. Up to 7 separate 'uses' can be accounted for in this template. The following can be configured for each 'use' in this model:
1. Development costs by month (soft/hard costs), or if the project is an acquisition, that can be entered accordingly. You could also have acquisition and renovation costs in this section. On the first debt module, you can define the percentage of these costs that are financed.
2. Exit month, Exit Cap rate, and selling fees.
3. Sq. Ft.
4. Units
5. Start Month of Rent
6. Rent per Unit/Mo
7. Max Monthly Rent
8. Avg. Rent per Sq. Ft. / Mo.
9. Rent Growth (yr. 2-3)
10. Rent Growth (yr. 4+)
11. Starting Occupancy
12. Monthly Improvement1
13. Stabilized Occupancy
14. Up to 17 operation expenses and their annual percentage growth
The above granularity allows the model to be built in a way where each gross rental revenue and OpEx is used to get a Net Operating Income for each 'use' and that is important in being able to calculate an exit value for each independently within the same model timeline.
Debt Financing - Leverage optional and includes up to 3 facilities (interest-only / P+i / p+i refi)The next awesome part of this real estate model is how debt financing works. The negative cash flows from acquisition / development will automatically flow to a construction loan 'draw' that is interest-only (accrual or monthly interest payments) and that lasts for however long the user defines in months.
The balance at the end of the defined term will flow to the 'initial loan'.
If there is no interest-only loan, it can be configured to flow right to the first initial loan as well, which has regular p+i amortization based on the terms. After that, the user can select to have a refinance loan based on the LTV and cap rate of the entire project on the given month selected.
All cash will flow accordingly and in the right months as this is configured. Repayment is defined with its own month selector as well and will most often be lined up with the exit of each 'use' whenever there has been enough cash built up to do so. Typically the exit all happens in the same month, but with this model it doesn't have to be.
All debt can easily be turned off with a 'yes/no' selector on the 'control' tab and in that case any negative cash flows simply flow to the final equity requirement (initial investment requirement).
Contributions / Distributions of Equity
To top everything off, the final monthly cash flows flow to a joint venture waterfall with standard IRR hurdles. The user can configured the percentage of equity contributed by the GP and LP respectively as well as the cash distribution percentages to each based on the total IRR achieved by the LP. If this is not a joint venture, simply enter 0% for the LP and all cash contributions and distributions will flow to the GP.
Final exit IRR and DCF Analysis reports are shown after all the logic above is completed. There is also an annual executive summary that is similar to an income statement with a cash flow section below it and the cash contribution / distribution results to the GP/LP at the bottom.
In general, this mixed-use real estate model is supposed to be as flexible as possible for any use case, but also designed for quicker analysis. It has anything you could ever what for investment analysis. 15 visualizations make the financial forecast much more digestible.
